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Comprehension check
Choose the best answer for each of these questions:
1 Horacio Blanco, a leading Argentine sports journalist , died because:
a He had no money to pay for his operation.
b The bank refused to release his money.
c The price of the operation had increased by 10%.
S p a re a tear for A rg e n t i n a
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A D VA N C E D
wrong
. All this was unthinkable as
recently as the mid-90s, when the
Peronist president, Carlos Menem,
was praised in the West for
taming
A rgentina's hyper- i n f l a t i o n
a n d
introducing a package of market-
friendly reforms. Menem pegged
the peso to the dollar, abolished
exchange controls, privatised large
chunks of Argentina's state-owned
firms and opened up the country to
the full blast of foreign competition
.
The key to his early economic suc-
cess was the dollar peg, since the
commitment to convert pesos into
dollars at a one-for-one exchange
rate meant that Argentina could not
fall back into bad habits and simply
print money when times got tough.
As a result, inflation fell from
5,000% a year in the late 1980s to
almost zero in the early 90s.
But the "miracle cure" contained
within it the seeds of its own
destruction. Being pegged to the
dollar was fine when the United
States currency was falling, as it did
for the first half of the 90s, because
that meant that Argentinian exports
to the rest of South America and
Europe remained competitive. It
was a different story, however, once
the dollar started to rise from 1995
onwards. The deflationary impact of
the dollar peg was exacerbated by
another development - the spate of
financial crises in developing coun-
tries that started in Mexico in 1994
and spread to Asia, Russia and
Brazil between 1997 and 1999
Duhalde has yet to find a way of
unfreezing deposits that satisfies the
depositors, compensates the banks
for the losses made as a result of
devaluation, and alleviates the
IMF's fears that the country could
slip into hyper-inflation. He is now
trying desperately to cut a deal with
the IMF that would provide a bail-
out in return for the acceptance of
stringent conditions. Until recently,
the fund's tough-love approach was
supported by A rgentinians, who
were convinced that any cash pro-
vided would find its way into the
pockets of the notoriously corrupt
political establishment. But the
IMF's insistence on two further con-
ditions has altered the public mood.
The first is that the government in
Buenos Aires changes its bankrupt-
cy law to allow foreign - almost cer-
tainly US firms - to buy up liquidat-
ed A rgentinian firms at barg a i n -
basement prices. The second is that
Argentina scraps an economic sub-
version law that was originally
passed to deal with leftwing terror-
ists in the 70s, but is now being used
against bankers accused of spiriting
millions of dollars out of the coun-
try. The fund says that the reforms
are vital if the confidence of foreign
investors is to be restored.
Argentinians think otherwise. "First
they came for our companies and
they took them away," says a fly
poster on the doors of Bank Boston,
pitted with dents from hammer
blows. "Then they came for our sav-
ings and they stole them. Now they
are coming for our whole country.
Argentina rise - now or never."
A rgentina is a country rich in
resources and culture. It feels its
humiliation deeply. The sense is that
the economic situation will get
worse before it gets better. History
suggests that the combination of a
dispossessed middle class and a
working class with nothing to lose is
a catalyst for revolution. That is the
real worry. Tragedy is not losing a
football match. It is what is unfold-
ing in Argentina now.
The
Guardian Weekly
13-6-2002,
page 10
© onestopenglish.com 2002 3 This page can be photocopied.
2 When the writer says the Argentinian economy is "imploding", he means:
a It is growing too rapidly.
b It is stagnating.
c It is collapsing.
3 Argentina’s middle classes are demonstrating every day because:
a They have lost their jobs.
b They are anarchists.
c They have become poor.
4 What was the initial effect of pegging the peso to the dollar?
a Inflation fell to almost zero.
b The dollar fell in value.
c Argentina printed more money.
5 What happened in 1995 when the dollar (and the peso) began to rise in value?
a There was a financial crisis in Mexico.
b Argentinian exports became more expensive.
c Inflation increased.
6 What will happen if Argentina changes its bankruptcy law?
a American companies will buy liquidated local companies at cheap prices.
b Bankers will be able to export currency freely.
c The money will go to the corrupt political establishment.
7 What is the forecast for the immediate future?
a Things will get better for a while.
b Things will get much worse.
c Things will get worse before they get better.
S p a re a tear for A rg e n t i n a
L E V E L T H R E E
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© one stopenglish.com 2002 4 This page can be photocopied.
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